Sensible tips for first-time buyers

PROPERTY NEWS

Aussie has released its top tips for first-home buyers. It’s a timely list too, with the home loan lender reporting a massive jump in requests for broker appointments from as first homebuyers step back into the property market.
The number of FHB’s requesting appointments with Aussie brokers via the website www.aussie.com.au has more than doubled since March, according to Aussie CEO Mr Stephen Porges. He says a combination of the cooling property market, an improved economy, and increased job security has spurred FHB’s back into the game.
“The market was white hot last year due to the Federal Government’s boost to the First Homebuyer’s Grant,” he said.
“Many FHB’s would have paid a premium for their properties during that hectic time. “Now that it has cooled off, those FHBs who didn’t buy a home in late 2009 and early 2010 are back and ready to make their first step on the property ladder.”
Mr Porges said the current climate - both in the real estate market and with interest rates returning to more “normal “ levels - it was easier for FHBs to make a more measured decision when it came to the biggest purchase of their lives. “In many areas throughout the country, there were inflated prices created due to extreme demand,” he said. “Many buyers could have paid over the odds for their home.” “This has abated somewhat, and those FHB’s who may have thought they had been left behind are now well-placed.”
Mr Porges said it has been well-documented that FHB’s are strong users of mortgage brokers as they can provide experience and advice in the often complicated world of finance. “There are hundreds and hundreds of loan products out there, and it would take months for FHB’s to conduct the research into what is the most appropriate product for them,” he said.

Here are some important tips from Aussie to help avoid the most common traps:

1 Work out how much you can afford to spend before you even look, and only look at apartments or homes clearly advertised within that price range. Do not waste your energy looking in the wrong suburb – because you may end up biting off more than you can chew.
2 Look at as many properties as possible in your price range to get an idea of what you can afford. Check with Aussie’s skilled mortgage advisers to work out what loan product suits your needs – especially your borrowing limit!
3 When working out the best home loan for you, check the ongoing payments, especially in the fine print for monthly service fees and other charges.
4 If you are worried about interest rate rises, you can split your loan between variable and fixed rates and take an “each-way” bet.
5 Make fortnightly payments, not monthly, so the interest on your mortgage does not add up.
6 Remember a low start-up interest rate, or honeymoon rate loan does not mean you will be paying less for your property in the long term.
7 Make absolutely sure your home loan repayments do not overly impact on your lifestyle. You do not want to only eat baked beans for dinner for the next 25 years.
8 Be prepared for the monthly repayments to rise and fall during the life of your loan. Make sure there is some financial room to move if rates rise. If rates fall keep paying the same amount each month or fortnight, so you pay off your loan quicker by eating into the principal owing.
9 The best step you can take in the search for your first place is get pre-approval for a loan, which Aussie and some other lenders can provide, so you know exactly what you can afford.